You own a $1 million portfolio of aerospace stocks with a beta of 1.2. You are very
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You own a $1 million portfolio of aerospace stocks with a beta of 1.2. You are very enthusiastic about aerospace but uncertain about the prospects for the overall stock market.
Explain how you could hedge out your market exposure by selling the market short. How much would you sell? How in practice would you go about “selling the market”?
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